Morgan Stanley analyst Robert Kad initiates coverage on Scorpio Tankers (NYSE: STNG) with a Equalweight rating and a price target of $82.00.

The analyst comments: “We are initiating coverage of Scorpio Tankers, Inc. (STNG.N) with an Equal weight rating (Energy Shipping & Logistics industry view: In-Line); our $82 PT implies +12.8% one-year total return (including a 2.5% dividend yield). STNG is a Monaco-based international shipping company and one of the world’s largest owners and operators of product tankers, specializing in the seaborne transportation of refined petroleum products such as gasoline, diesel, jet fuel, and naphtha. Founded in 2009 as part of the Scorpio Group, the company operates a modern, fuel-efficient fleet currently comprised of 79 eco-spec product tankers (29 LR2 tankers, 36 MR tankers, and 14 Handymax tankers) with an average age of 10.2 years (before accounting for announced fleet optimization, which includes five vessel sales and 12 newbuild orders). STNG's commercial strategy emphasizes exposure to spot markets and participation in pooled commercial platforms (with 80-95% of revenue days skewed toward a spot market–weighted model), allowing it to capitalize on volatility in global tanker rates while maintaining strong utilization and operating efficiency.”

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Shares of Scorpio Tankers closed at $77.33 yesterday.